Bank said Tuesday it plans to compensate customers whose money is withdrawn with counterfeit cash cards through no fault of their own.
Officials of UFJ Bank, which is finalizing details of the plan, said the measure might be applied retroactively to a certain period of time for cases in which the bank can confirm there were no mistakes on the depositor's side.
From March, the bank will replace cash cards that store data on a magnetic strip with those equipped with a microchip, which makes the cards harder to forge.
The new cards will be supplied free of charge to existing customers of its All One new service accounts introduced last year and new customers who sign up for such accounts between next month and June, the bank said.
The bank said it plans in the future to widen the scope of the switch to customers with ordinary deposit accounts.
Japanese banks have long maintained that they are not responsible for losses suffered through cash-card fraud.
But following a spate of reports of cash card frauds and criminals' high-tech ways of stealing card data, the Financial Services Agency studied systems in the United States and Europe in which lenders compensate victimized customers to a certain extent.
The Japanese Bankers Association announced in January a positive stance for possible countermeasures.
Whether banks introduce such measures and how much they charge for them has become an area of competition.
UFJ Bank said it will allow all customers by June to set their own limit on the daily allowable amount of cash withdrawal through automated teller machines. At present, the bank has a uniform limit of 3 million yen for withdrawals via ATMs.